National Bank of Solomon Islands Ltd v Premium Balsa Products Ltd [2001] SBHC 132; HC-CC 157 of 2001 (8 August 2001)

HIGH COURT OF SOLOMON ISLANDS

CIVIL CASE NO. 157 OF 2000

NATIONAL BANK OF SOLOMON ISLANDS LIMITED

-V-

PREMIUM BALSA PRODUCTS LIMITED
(IN BOTH ITS CORPORATE CAPACITY AND AS TRUSTEE OF THE SOLOMON ISLANDS ECOTIMBERS TRUST)
AND VERNON SMITH AND ROSE ANNIE ANILABATA

HIGH COURT OF SOLOMON ISLANDS
(PALMER J.)

HEARING: 31ST JULY 2001
RULING: 1ST AUGUST 2001

A & H Lawyers for the Applicant/First Defendant
Sol-Law for the Plaintiff

PALMER J.: The Applicant / First Defendant applies by Summons filed 16th July 2001 for orders inter alia that the execution of the Judgement against the Defendants signed, sealed and perfected on 17th October 2000 be stayed and that the First Defendant be granted reasonable time not exceeding six months to repay the remaining balance of the judgement. The Applicant relies on the affidavit of Vernon Smith also filed on 16th July 2001. Mr Smith is a both a director and major shareholder in the First Defendant company. He deposes that out of the judgment sum of $28,130-32, owing to the Plaintiff, he had already paid into court the sum of $23,240-17 leaving only about $3,665-15 outstanding apart from interest and costs. He claims that that balance can easily be paid off in three months if a lease is granted to a prospective tenant who has indicated an interest to rent the property in Parcel No. 192-010-71 for $1,500-00 per month. Learned Counsel Mr Apaniai for the Applicant submits that on those grounds this Court should grant a stay for six months to enable it to pay off the outstanding amount rather than putting the property out on sale.

Mr Sullivan for the Plaintiff however opposes the application. He submits that if the Applicant wishes to stop the sale then he can only do so on certain conditions. First, that he pays to the Plaintiff the outstanding amount of interest claimed being $19,731-84 and secondly deposits into Court the disputed sum of costs, $37,140-57. Failing this, the Court should not grant any stays of execution.

Mr Sullivan relies on three cases, Inglis and Another -v- Commonwealth Trading Bank of Australia 126 C.L.R 161 (a case from the High Court of Australia) (hereinafter referred to as “Inglis Case”); Samuel Keller (Holdings) Limited and Another v. Martins Bank Limited., Henry W. Lawton Ltd (Claimant) [1971] 1 W.L.R. 43 (English Court of Appeal); and Australia and New Zealand Banking Group Limited v. Goodwill Industries Limited Civil Case Number 11 of 2001 (unreported) judgment delivered 27th July 2001 (“the ANZ Case”). In Inglis Case, the High Court of Australia applied the general rule that an injunction will not be granted restraining a mortgagee from exercising powers conferred by a mortgage and, in particular, a power of sale unless the amount of the mortgage debt, if this is not in dispute, is paid or unless, if the amount is disputed, the amount claimed is paid into court. In that case the mortgagor claims to be entitled to a set off in the amount of damages claimed against the mortgagee. The Court did not accept this argument and refused to grant any restraining orders against sale. The case of Samuel Keller (Holdings) Ltd (ibid) an English Court of Appeal case was referred to in Inglis Case, as endorsing the same general rule. The ANZ Case applied the same principle where the claim was disputed and required inter alia that the judgment sum (disputed sum) be paid into Court.

Mr Sullivan also points out that the Judgment sum had been outstanding against the First Defendant as far back as 17th October 2000. He points out the First Defendant had not sought to pay off its claims until recently when part payment was made by one of the Guarantors, Mr Vernon Smith, also the Second Defendant in this case.

I have considered carefully the submissions of learned Counsel for the First Defendant and the reasons advanced why a stay of execution should be granted. Unfortunately, the legal approach to be adopted in such applications is as clearly expounded by learned Counsel Mr Sullivan in his submissions; that a stay can only be granted on certain conditions. One of those being that the outstanding balance of $19,731.84 be paid to the Plaintiff and secondly, that the amount in dispute being $37,140.57 be paid into Court. Failing that, the sale cannot be restrained at this eleventh hour.

Learned Counsel Mr Sullivan has submitted draft orders for consideration by this Court. I am satisfied the second order giving time to the Applicant to meet the conditions stipulated above is the more appropriate order to adopt. The only difference is that instead of 7 days the Applicant shall be given 14 days to meet the requirements failing which the sale is to proceed as stipulated in the draft orders submitted to Court and now adopted as the formal orders of this Court.

ORDERS OF THE COURT:

1. Subject to payment by the First Defendant within 14 days of the date of these orders of:-
   
   1. the sum of SBD19,731.84 to the Plaintiff; and
      
   2. the sum of SBD37,140.57 into Court subject to the terms of these orders or until further or other order;
      

execution of the Judgment herein against the First Defendant perfected, signed, and sealed on 17 October, 2000 be stayed for six months from the date of the making of these orders.

2. In the event that the First Defendant fails to pay the moneys referred to in order 1 as aforesaid then:-
   
   1. The First Defendant, the Second Defendant, Vernon Smith, Joseph Harold, and their servants, agents, invitees or any other person entering or occupying Parcel Numbers 192-010-71 and 192-010-72 howsoever through, under, or by the authority of either of them shall forthwith deliver vacant possession of Parcel Numbers 192-010-71 and 192-010-72 to the Plaintiff and remove all their chattels from same.
      
   2. The First Defendant, the Second Defendant, Vernon Smith, Joseph Harold, and their servants, agents, invitees or any other person entering or occupying Parcel Numbers 192-010-71 and 192-010-72 howsoever through, under, or by the authority of either of them are restrained until further order from entering, occupying, or in any way interfering with Parcel Numbers 192-010-71 and 192-010-72 or the improvements thereon without the prior written consent of the Plaintiff.
      
   100. The First Defendant, the Second Defendant, Vernon Smith, Joseph Harold, and their servants, agents, invitees or any other person entering or occupying Parcel Numbers 192-010-71 and 192-010-72 howsoever through, under, or by the authority of either of them are restrained until further order from in any way interfering with the Plaintiff in the exercise of its power of sale over the aforementioned parcels.
        
   100. The Provincial Police Commander at Honiara and all Police officers under his direction shall forthwith upon receipt of a copy of these orders and a written request from the Plaintiff’s solicitors for enforcement of same attend and enforce the said orders using such force as is reasonably necessary for such purpose (including the entry on to the said parcels by force or otherwise).
        
3. In the event that the First Defendant pays the moneys referred to in order 1 as aforesaid and in the further event that the balance of the Plaintiff’s claim, costs, and interest (including costs incurred or interest accrued in the interim) is not paid within the period of six months from the date hereof to the satisfaction of the Plaintiff then in the absence of any order to the contrary and without further order:-
   
   1. the unpaid balance of the Plaintiff’s claim, costs, and interest (including costs incurred or interest accrued in the interim) so certified upon affidavit by the Plaintiff or its solicitor shall be paid by bank cheque from the monies held in Court pursuant to order 1 b. hereof to the Plaintiff, and
      
   2. any surplus moneys remaining in Court after payment of the moneys referred to in order 3 b. hereof shall be paid by bank cheque to the trust account to the First Defendant’s solicitor.
      
4. In the event that the monies paid out of Court pursuant to order 3 a. hereof are not sufficient to pay in full the unpaid balance of the Plaintiff’s claim, costs, and interest (including costs incurred or interest accrued in the interim) so certified upon affidavit by the Plaintiff or its solicitor then in the absence of any order to the contrary and without further order:-
   
   1. orders 2 a., b., c., and d. hereof shall be activated with immediate effect from the expiration of the said period of six months; and
      
   2. the Plaintiff shall have leave to immediately advertise the First Defendant’s Fixed Term Estate in Parcel Numbers 192-010-71 and 192-010-72 for sale by tender PROVIDED THAT the Plaintiff seeks the leave of the Court prior to accepting any tender for the purchase of aforementioned.
      
5. The First Defendant pay the Plaintiff’s costs of and in connection with this application.
   

PENAL NOTICE

TAKE NOTICE that any breach of orders 2 or 4a. hereof is contempt of Court and is punishable by a fine and/or imprisonment.

THE COURT